Vera Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Vera is a clinical-stage biotechnology company developing treatments for serious immunological diseases. It has no products approved for sale and generated no product revenue.
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | No product revenue | No product revenue |
| Research and development expense | $23.2 million | $25.1 million |
| General and administrative expense | $7.9 million | $6.2 million |
| Total operating expenses | $31.1 million | $31.3 million |
| Net loss | $28.4 million | $30.1 million |
| Net loss per share, basic and diluted | $0.56 | $0.80 |
| Net cash used in operating activities | $33.8 million | $26.3 million |
Margins are not meaningful because Vera has no product revenue. Other income, net, was $2.7 million, up from $1.2 million, primarily reflecting higher interest income, partly offset by higher interest expense.
At March 31, 2024, cash and cash equivalents were $69.1 million and marketable securities were $334.6 million, totaling $403.7 million, compared with $160.7 million at December 31, 2023. Total assets were $419.4 million; current liabilities were $14.5 million. Long-term debt had a $50.1 million carrying amount, against $50.0 million principal. Accumulated deficit was $337.5 million.
Financing activities provided $276.5 million during the quarter, including $269.6 million net proceeds from the February follow-on offering. Investing activities used $219.3 million, mainly reflecting purchases of marketable securities. Operating cash use increased year over year, in part because accounts payable and accrued liabilities declined.
Changes versus the prior comparable period
- Net loss improved by $1.7 million, while operating expenses were broadly flat. R&D expense fell 8%, mainly because Q1 2023 included clinical drug-supply production for the Phase 3 IgAN trial; clinical-trial and personnel costs increased in Q1 2024.
- G&A expense rose 29%, primarily due to higher payroll, headcount and professional-services costs.
- Cash and marketable securities rose substantially following the February 2024 equity offering. Class A shares outstanding increased from 44.5 million at year-end to 54.5 million at March 31; 54.7 million were reported outstanding as of May 3, 2024.
Programs, outlook and risks
- Atacicept: The company is prioritizing its pivotal Phase 3 ORIGIN 3 trial in IgAN. Management reported positive Phase 2b ORIGIN results at 24, 36 and 72 weeks, including reductions in proteinuria and disease biomarkers and eGFR stabilization; the 72-week extension was open-label. These results are not a guarantee of Phase 3 success or regulatory approval.
- Other programs: Vera holds rights to develop atacicept for lupus nephritis and MAU868 for BK virus infection. The company previously delayed enrollment in the pivotal lupus nephritis trial and commitment of resources to MAU868; it says near-term resources are focused on IgAN.
- Outlook: Management expects continued losses and negative operating cash flows for at least several years, with expenses expected to increase as trials advance and the company prepares for potential regulatory applications and commercialization. It believes March 31 cash, equivalents and marketable securities will fund operations and capital needs for at least 12 months after the financial statements’ issuance. The filing gives no revenue or earnings guidance.
- Funding and debt: Vera expects to need substantial additional capital; failure to obtain funding on acceptable terms could delay, reduce or end development programs. Its $50.0 million Oxford loan is secured by company assets, carries a variable rate, matures in 2027 and requires a 7% exit fee at maturity or prepayment. The agreement also restricts certain activities.
- Key risks: Clinical-trial results, recruitment, regulatory review, safety, competition, reliance on third-party manufacturers and CROs, and single-source supply chains could affect timelines and outcomes. Macroeconomic and geopolitical disruptions could affect operations or access to capital. Vera also disclosed that its South San Francisco subtenant has reported substantial doubt about its ability to continue as a going concern; Vera remains responsible for approximately $3.7 million of minimum lease commitments for those facilities.
- Other disclosures: The ATM prospectus was terminated in January 2024, so no further ATM sales can occur unless a new prospectus or registration statement is filed. The company reported no material legal proceedings, and management concluded disclosure controls were effective as of March 31, 2024.
Important facts for investors to verify
- Subsequent ORIGIN 3 enrollment, interim or final results, safety findings, and any changes to expected trial or regulatory timelines.
- Whether the stated minimum 12-month cash runway remains achievable as trial, manufacturing and commercial-preparation costs change.
- Future cash burn, marketable-security liquidity, and any new equity, debt or collaboration financing, including potential dilution or restrictions.
- Progress and resource allocation for lupus nephritis and MAU868, including whether either program resumes.
- Debt terms and interest burden, and the financial exposure if the South San Francisco subtenant cannot meet its lease payments.